US Energy Security: Issues Related To Potential Reductions In Venezuelan Oil

U.S. and international oil industry experts told us that the resulting loss of expertise contributed to the decline in oil production. Except during the strike, Venezuela’s exports of oil and petroleum products to the United States have remained relatively stable in recent years. In 2005, Venezuela’s national oil company announced plans to expand its oil production significantly by 2012 but oil industry experts doubt the plan can be implemented because the company has not negotiated needed deals with foreign oil companies as called for in the plan. A model developed for DOE estimates that a six-month loss of 2.2 million barrels of crude oil per day—about the size of the loss during the Venezuelan strike—would, all else remaining equal, result in a significant increase in crude oil prices and lead to a reduction of up to $23 billion in U.S. GDP. A Venezuelan oil embargo against the United States would increase consumer prices for petroleum products in the short-term because U.S. oil refiners would experience higher costs getting replacement supplies. A shut-down of Venezuela’s wholly-owned U.S. refineries would increase petroleum product prices until closed refineries were reopened or new sources were brought on-line. These disruptions would also seriously hurt the heavily oil- dependent Venezuelan economy. "Full article:link" http://www.vcrisis.com/index.php?content=letters/200606230333

Note: http://www.vcrisis.com/...